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Walt Disney (DIS) dominates the field workplace and has shortly launched an extremely profitable streaming service as a result of it owns among the world’s hottest mental property. The corporate spent $4 billion to purchase LucasFilm (“Star Wars”), the identical quantity to purchase Marvel and $7.4 billion to buy Pixar.
These offers (particularly Marvel) weren’t universally beloved when former CEO Robert Iger made them however they’ve turned out to be borderline absurd bargains. Disney now has a mannequin in place the place it will probably launch films which are almost assured to be blockbusters on the field workplace.
It is dangerous to spend $300 million to provide a film primarily based on a brand new concept. Spending that very same funds to make a Marvel superhero film, a brand new “Star Wars,” a Pixar animated movie, or a film primarily based on traditional Disney characters takes away almost all the danger.
The identical logic applies to streaming and even theme-park rides.
Customers know “Star Wars,” Marvel, Pixar, and Disney’s iconic characters. They need to see their additional adventures on Disney+, take footage with these characters at theme parks, play videogames with these characters, and, in fact, trip rides primarily based on all these widespread properties.
Disney rival Comcast (CMCSA) doesn’t have the content material lineup Disney does, nevertheless it owns quite a lot of large franchises together with “Quick & Livid,” “Minions,” “Secret Lives of Pets,” and its traditional monster characters. These properties energy its movie slate, refill its theme park with rides and characters and have helped construct its streaming service.
It is a mannequin that very clearly works, which has made any out there top-tier properties out there extremely helpful. That is why it appears inexplicable that essentially the most helpful piece of mental property in the marketplace bought, and it wasn’t purchased by Disney, Netflix, or Comcast.
Disney, Netflix, Comcast Lose Out on ‘Lord of the Rings’
While you have a look at content material not owned by a serious participant, on the extent of world-building franchises like Marvel, “Star Wars,” and perhaps “Minions,” only a few can be found. Amazon (AMZN) purchased rights to James Bond, a property that has been used for profitable videogames and has not been exploited on tv and in theme parks.
With 007 off the desk, the most important franchise that in idea might have been bought by Disney, Netflix, or Comcast is the literary works of J.R.R. Tolkien, most notably “Lord of the Rings” and “The Hobbit.” Few properties have the identify recognition of Tolkien’s most well-known books, and no content material almost this widespread doesn’t have a theme park tie-in.
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Think about Disney including a “Lord of the Rings” land to Disney World or Comcast’s Common Studios doing the identical at its new Epic Universe theme park.
Netflix (NFLX) , in fact, doesn’t have theme parks, nevertheless it has a fledgling video games division that would have benefitted from a reputation property and it might have licensed the theme-park rights to the best bidder.
That, nonetheless, didn’t occur. Quite, Embracer, a Swedish gaming firm, purchased the rights to Tolkien’s hottest works for a reported $2 billion.
Disney, Comcast, and Netflix Made a Mistake
Embracer has a relationship with the earlier rights proprietor, the Center-earth Enterprises division of Saul Zaentz Co., because it had licensed some Tolkien merchandise for card video games and board video games.
That will have given it an edge in negotiations, nevertheless it’s arduous to assume that Disney, Comcast, or Netflix wouldn’t have made a bigger provide. That seems to not have occurred.
Sure, Amazon at the moment holds “Lord of the Rings” tv rights, which lessens the instant worth for any firm to purchase rights to the Tolkien properties and use them on their streaming platforms. However theme-park rights alone would have made an acquisition logical for Disney or Comcast.
In Comcast’s case, it licenses and doesn’t personal “Harry Potter,” which is the signature property in any respect its U.S. theme parks. It additionally pays Disney to license each Marvel characters and “The Simpsons” at its Florida parks. The corporate wouldn’t have changed Harry Potter at any of its present parks, nevertheless it might have made “Lord of the Rings” part of Epic Universe and a substitute for a few of its dated sights throughout the remainder of its portfolio.
A “Lord of the Rings” land would additionally give Disney one thing it doesn’t have — a fantasy/magic franchise. It will make sense in Florida at Hollywood Studios, Animal Kingdom, and even Magic Kingdom.
Netflix, nonetheless, might have made the most important mistake right here. It might have bought Tolkien’s rights — even when it needed to pay $3 billion — made films, video games and, finally, TV exhibits utilizing the IP, then licensed the theme -park rights to Disney or Comcast, probably recouping its funding.
Embracer received a deal right here, a steal actually, that Netflix, Comcast, and Disney will remorse for a very long time.
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